Category Archives: globalisation/corporations

… only if the unexpressed “arrogant turd” is racial vilification. We colonials take rather unkindly to being labelled “backward”, and I am sure the Singaporeans were not impressed by Trujillo’s stewardship either:

SOL TRUJILLO’S claims on the BBC that Australia is a racist country sit oddly with the dog-whistle politics which Telstra played so hard and so often under his three-year stewardship.

"We are an Australian company, majority owned by Australians. We are not from Singapore or anywhere else," Mr Trujillo’s chairman, Donald McGauchie, told shareholders at the company’s AGM a year ago.

The Singapore reference was a shot at Telstra’s main competitor, Optus, which is owned by Singapore Telecommunications…

So writes Michael West in today’s Sydney Morning Herald. I even find myself in broad agreement with Peter Costello, former Howard treasurer:

There are plenty of reasons to be critical of Sol Trujillo’s performance as chief executive of Telstra. Race is not one of them.

Kevin Rudd was foolish to take a cheap shot – saying "adios" – when Trujillo left. And Trujillo is milking it as evidence that Australia is racist.

But come on, Sol. You came to Australia and took up the prize job in Australia’s telecommunications industry. After four years you are leaving with $30 million of cash and bonuses. And you want us to believe you are a victim of racism?…

Trujillo says he changed Australia. Not in the way he thinks. One change is that corporate boards are going to be more wary of overseas appointments in future. Australian executives are as good as any in the world. A chief executive who understands the country and has a long-term interest in its future is a valuable asset for a company in a sensitive sector.

The Telstra directors could not have been surprised things ended the way they did under Trujillo. His previous track record was there for all to see. In my view, the board has a lot of explaining to do. It’s about judgment and performance. It is not about race.

Over in the sidebar you will see various perspectives, Oz and other, on the current economic crisis – an area I am far from expert in. Not listed there are Jim Belshaw’s posts in his Management Perspectives blog.

Back in 1990 when I first met M, then very recently arrived in Australia, I was living in Paddington at PK’s place – and a nice place it was too. The first morning M appeared at breakfast PK was quite nonplussed – being of Lithuanian background he had fairly strong Cold War views in some respects, though not in others. He did indeed suggest soon after that M may be a Chinese spy. He later changed his mind and may even deny the story today. 😉

No doubt among the very large influx of Chinese students at that post-Tiananmen time there would have been some spies, mostly there to monitor the other students. Chinese were used to being monitored. M solved the problem back home in China by joining the neighbourhood spooks – hiding in plain sight, you could say. The neighbourhood committee of spooks also had a benign role; as well as reporting suspicious activity they were agents too of social welfare. M claimed he was particularly lax on the reporting side, especially given his own association with quite a few westerners.

My students at the language college I then worked in more or less assumed someone could be a spy, or “a boss” as they tended to say, and sussed one another out before they started opening up about certain topics.

About a decade later I was offered a free trip to Shanghai by the parents of one of my SBHS students – and not to influence me, as it was offered after the exams. As M said, they were just being Chinese and were grateful I had helped their son. I found a face-saving way of refusing the gift.

Where I tutor in Chinatown there is a prominent display on the wall of photos of the principals in the company with leading pollies, including Mr Ruddock. This is part of the Chinese way of business – establishing your connections or guanxi.*

“Guanxi” literally means "relationships", stands for any type of relationship. In the Chinese business world, however, it is also understood as the network of relationships among various parties that cooperate together and support one another. The Chinese businessmen mentality is very much one of "You scratch my back, I’ll scratch yours." In essence, this boils down to exchanging favors, which are expected to be done regularly and voluntarily. Therefore, it is an important concept to understand if one is to function effectively in Chinese society.

The importance of "Guanxi"

Regardless of business experiences in ones home country, in China it is the right "Guanxi" that makes all the difference in ensuring that business will be successful. By getting the right "Guanxi", the organization minimizes the risks, frustrations, and disappointments when doing business in China. Often it is acquiring the right "Guanxi" with the relevant authorities that will determine the competitive standing of an organization in the long run in China. And moreover, the inevitable risks, barriers, and set-ups you’ll encounter in China will be minimized when you have the right “Guanxi” network working for you. That is why the correct "Guanxi" is so vital to any successful business strategy in China.

Although developing and nurturing the "Guanxi" in China is very demanding on time and resources, the time and money necessary to establish a strong network is well worth the investment. What your business could get in return from the favors for your partners are often more much more valuable, especially in the long run, and when you’re in need. Even domestic businesses in China establish wide networks with their suppliers, retailers, banks, and local government officials. It is very common for individuals of an organization to visit the residence of their acquaintances from other organizations, bringing gifts (such as wine, cigarettes, etc.). While this practice may seem intrusive, as you spend more time learning the Chinese culture, it will become easier to understand and take part in this practice that is so central to successful Chinese commercial activity…

We should keep this in mind as we contemplate the Joel Fitzgibbon affair and the activities of Ms Liu. Still, the narrative is very much, and not entirely wrongly, taking what I may call the PK route. See Greg Sheridan in today’s Australian.

NO nation makes a greater espionage effort directed at Australian military and commercial technology than does China.

It was because of China’s massively increased espionage activities in recent years that in 2004 the Australian Security Intelligence Organisation set up a new counter-espionage unit.

But the problems China poses for a country such as Australia in the security and espionage field extend far beyond what might be regarded as traditional espionage.

Beijing has the most unified and co-ordinated sense of national power of any big nation on Earth. Modern China is not a democracy, but it is a very effectively functioning modern state.

It has a highly competent bureaucracy that seeks to penetrate all sectors of Chinese society and serve what the ruling Communist Party regards as the broader national interest. This includes monitoring, and where possible influencing, Chinese business people and students in their activities overseas.

This is a highly elusive matter, extremely difficult to quantify.

The overwhelming majority of people of Chinese ethnic background living in Western societies such as Australia or the US have no relationship with the Chinese state.

And most of those who do have any relationship with the Chinese state have an entirely wholesome one, such as doing business with the Government or promoting cultural exchange.

But the Chinese Government seeks to use every resource it can to gain information and to exercise power. That includes, on the testimony of Chinese defectors and Western intelligence agencies, often using business people and students as agents where it can recruit them…

He isn’t entirely wrong, far from it in fact, and does at least qualify what he says; but the framing of what he says does tend towards suspicion of Fitzgibbon and Liu, and Fitzgibbon must have been especially dense not to have declared those two trips.

And of course they spy, we gather intelligence – but that is another matter.

Back in the mid 90s I had the opportunity to meet the former Minister of Culture Wang Meng who was visiting from Beijing. He was at that stage on the outer, as he had publicly refused to congratulate the troops after Tiananmen. He still had plenty of guanxi though, apparently. After all, he had been able to come to Sydney. I was interested because I had read some of his stories (in English of course) and they were rather good. M was not so interested and didn’t go, saying he simply didn’t trust anyone in a high position.

I put this in a comment yesterday, but after watching The 7.30 Report tonight on the UK, and hearing what Warren Buffet has had to say lately, it seemed very apt and very resonant and worth making more prominent: Libertarian Experiment in Iceland Fails by Iris Erlingsdottir. She is writing neither about Rudd nor Australia of course, but I think it is relevant.

… [Milton] Friedman saw Iceland as his utopia. "I would like to be a zero-government libertarian [but] I don’t think it’s a feasible social structure. I look over history, and outside of perhaps Iceland, where else can you find any historical examples of that kind of a system developing?"

At first, the policies appeared to be very successful. The economy grew at a strong pace, rising until Iceland achieved one of the highest per capita GDPs in the world. In 2007 it also topped the score for the United Nation’s Human Development Index.

Iceland rocketed to the top 10 in the indexes of economic freedom. The Cato Institute praised the "Nordic Tiger" for its flat taxes, privatization and economic freedoms, and rated it as the least regulated country in the world.

Unfortunately, it has become evident that these libertarian policies were not the panacea that Friedman claimed they were. In fact, economists are already using Iceland as a textbook case of how to ruin a nation’s economy. As Paul Krugman recently noted, there is an "almost eerie correlation between conservative praise two or three years ago and economic disaster today."…

I am not going to go here much. Neither has anyone else so far as it stands at 2.20pm with COMMENTS: 0 at the end. Sure is great at phrase-making though – almost Keatingesque:

It is bad enough to have Rudd trying to turn himself, in the blink of an eye, from an adherent of the cautious, responsible economic conservatism of Howard into a slightly more genteel version of a foaming-at-the-mouth radical such as Hugo Chavez.

But to add to that effrontery, we see him every day in the parliament denouncing neo-liberal extremism as he describes me as "the member for Goldman Sachs".

Which seems to be one of Mr Turnbull’s principal beefs in a piece that carries ad hominem to new heights.

I congratulate the Rudds, especially Therese Rein, on their success. Their business grew into a very substantial one in Australia and as other countries followed the Australian approach, grew there as well exporting the expertise developed by them when they seized the opportunity created by Howard’s decision in 1998.

But what are we to think of the wealthiest Prime Minister Australia has ever had, a man greatly enriched by the privatisation and outsourcing of government services, standing up again and again to denounce the very policies from which he and his family have profited so extensively.

It is more than a bit rich. It is as hypocritical, as chutzpadik, as his essay is absurd.

Whether or not Rudd’s essay – which I have read—is the world’s greatest analysis is beside my point really; I would agree that he glossed over the Hawke-Keating years in that essay. On the other hand he is far from alone in his concern that “neo-liberalism” is bearing fruit as we speak.

It’s probably fair to say that Phillip Adams writes and talks far too much, and sometimes it shows. Of course the last person who should say that is a blogger as obsessive as I am. Today is one of his better days.

Early in my newspaper career one of Australia’s most respected educators sent me a stern letter.

Dr James Darling didn’t mince words in his eagerness to mince me. "Dear Mr Adams, I do not approve of you. I do not like what you write. However, I understand that you may have some influence with young readers." He proceeded to attack my most recent column in which I’d been unusually pessimistic about the state of the world.

I’d got a bit rabid, and morbid, from a bite of the black dog, to employ Churchill’s metaphor for depression. Instead of being moist of nose and waggy of tail, as was and remains my puppyish style, a crisis in the Cold War had me snarling at the reader, provoking Geelong Grammar’s most famous headmaster to thrust quill into inkwell. Darling told Adams the cries of pain I was hearing in the world – and these are his exact words – "are not the pains of death but of birth", and recalled other moments in human history when observers had made the same mistake. Confusing – and these are my words – the deathbed with the labour ward. Among his scholarly examples, Greece in the 4th century BC.

Time to reread the old darling’s letter. At a time when the news is not merely of deficit and depression, but of Armageddon and apocalypse. When editorials read like suicide notes. When Obama in his inaugural and Rudd in every other utterance have the sky falling and the end nigh. The bears have killed the bulls and black dogs prowl in packs.

Dr Darling, later Sir James, was right. Forget dodos and dead parrots and cheer the arrival of stork and phoenix…

…This could be the time for the biggest rethink in generations. For improvements to the way we run our businesses, farms, governments, societies, personal lives. We should listen to the Dr Darlings and the Ismail Serageldins because pessimism is a self-fulfilling prophecy. It’s not enough to rebuild Henry Ford’s Detroit. It’s time to build William Blake’s New Jerusalem.

So why can I share the hopes, but not necessarily the optimism? Because I well remember another moment like this. And so do you. It was quite recent. The end of the Cold War…

The orchestrated dread of communism yielded to the dread of Islam – or what Christopher Hitchens called "Islamic fascism". It was as if we were addicted to fear and couldn’t live without it. The Cold War was reborn as the War on Terror – and we returned to paranoia. The moment was utterly, tragically lost.

Let’s demand better – the best – from our governments, societies, scientists, corporations and ourselves. Let’s not lose this moment.

Federal Industry Minister Kim Carr says there is an extraordinary double standard when it comes to executive pay and worker benefits.

The clothing manufacturer Pacific Brands this week sacked more than 1,800, but last year its top executives received more than $7 million in pay rises.

Outgoing Telstra CEO Sol Trujillo is also due for a multi-million dollar payout.

Senator Carr says the executives need to explain.

"What I’ve seen for many years is there seems to be a great disparity between the way in which executives are treated and the way in which workers are treated," he said. “Look at what’s happening with Telstra. I find it quite extraordinary. There’s an enormous double standard about what happens on the shop floor and what happens in the boardroom." – ABC.

Without venturing into the politics or economics of it or analysing it in any way, my gut reaction to this story is great sadness. Here go ordinary jobs for ordinary people. What indeed do they do now? There are not many ordinary jobs for ordinary people left.

Bonds owner and clothing manufacturer Pacific Brands says it will cut 1,850 jobs in Australia over 18 months after posting a $150 million first-half loss and suspending its dividend.

The cost-cutting will see Pacific Brands close the majority of its Australian clothing and manufacturing operations, discontinue small labels and brands, and sell properties or relocate.

The Discovery of Global Warming -- hypertext history of how scientists came to (partly) understand what people are doing to cause climate change: from the Center for History of Physics of the American Institute of Physics.

Islamophobes please note

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